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Scientific Games shares fall on big 4Q loss

NEW YORK (AP) -- Shares of Scientific Games Corp. fell Tuesday after the instant-win lottery ticket maker said its fourth-quarter loss more than tripled and fell significantly short of Wall Street predictions.

THE SPARK: The New York-based company posted a loss of 29 cents per share after the market closed Monday. Analysts surveyed by FactSet expected a profit of 5 cents per share. Revenue rose 4 percent to $249.2 million, beating analysts' predictions of $235.3 million.

THE BIG PICTURE: Scientific Games, which also makes video slot machines and other gaming systems, attributed the steep loss mainly to $24 million in charges related to a drop in the values of gaming terminals and software, along with $5.8 million in asset impairment charges on lottery systems contracts.

Scientific Games also is in the process of buying gaming equipment company WMS Industries Inc. for about $1.42 billion in a bid to expand its product offerings. The deal, announced in January, is expected to close by the end of the year.

THE ANALYSIS: Stifel Nicolaus analyst Steven Wieczynski said that adjusted for various items, Scientific Games actually posted an adjusted profit of about 9 cents per share, which would have beat analysts' predictions.

Wieczynski, who backed his "Hold" rating for the stock, said that while the quarter's results were mixed, he remains intrigued by the pending WMS acquisition. While he was originally skeptical of the deal and its purported $90 million in cost savings, Wieczynski said he's grown more encouraged by the prospect.

THE SHARES: Down 60 cents, or 6.8 percent, to $8.28 in afternoon trading, after falling as low as $8.06 earlier in the session. Over the past 52 weeks, the company's shares have traded between $5.53 and $12.29.

The stock started the day up about 2 percent since the start of the year.